Thursday, July 6, 2017

In the days before President Trump's inauguration in January, Alibaba's Jack Ma was among the parade of billionaires and other dignitaries appearing at Trump Tower in New York City. At an impromptu press conference with Trump following the meeting, Jack Ma promised to create 1 million jobs in the U.S. within five years. This week, Jack Ma is back on U.S. soil to host the Alibaba Gateway 17 conference in Detroit, Michigan, where the central proposition is that Alibaba's e-commerce platform is the gateway for small and medium-sized businesses in the U.S. to access the booming Chinese economy. The Alibaba Cloud platform is a key enabler of this gateway.

Ma argues that the figure of one million new U.S. jobs is not implausible. After all, Alibaba claims to be responsible for the creation of 30 million new jobs in China already and current growth rates for the main Alibaba are impressive:

For this year, Alibaba expects to generate $10.0 billion in free cash flow, growing at 37% CAGR. The guidance for FY 2018 calls for revenue growth in the 45-49% range, among the best in the world for companies of its size. As previously mentioned in this series, Alibaba's gross merchandise value (GMV) is expected to hit $547 billion this year and the target is $1 trillion for FY 2020. Since Alibaba already accounts for 11% of all retail sales in China, the company is seeking much of its future growth to come from overseas. Hence, this week's Alibaba Gateway 17 conference in Detroit hopes American SMBs will jump on board, lured by the 500 million active Chinese consumers on the platform.

Given the size of its operations in China, it is no exaggeration to say that Alibaba is built on data. During its November 11th selfie shopping festival last autumn, online ordering reached a peak of 175,000 transactions per second for a total of 657 million delivery orders that data. With data centres capable of handling such a load, it is clear that Aliyun's cloud capacity is highly scalable. Its data centre architecture, while not as publicly transparent as that of Facebook, Microsoft or Google, evidently have succeeded in overcoming the technical challenges involved in moving so much data so quickly across data centres and national network.

Among the technical skills required to operate at such scale is the search engine and personalisation algorithms to ensure that each user can find the product, services and entertainment that best matches their unique profile. Alibaba says it has 507 million mobile active users and over 1 billion active listings in its database of products and content. As AWS and Google, Alibaba is moving swiftly to implement speech recognition as a new customer input for generating system requests. Ultimately this requires a knowledge graph matched to an evolving user profile. Millions of customer inputs or even customer support inquiries must be processed for the 100,000+ merchants on the Alibaba platform already.

As noted previously, Aliyun's major domestic data centres are in Beijing, Hangzhou, Qingdao, Zhangbei and Shenzhen. Other active data centres are located in Hong Kong, Singapore, Tokyo and Silicon Valley. The company has announced plans to expand this fleet to 17 data centres, including many in neighbouring Asian countries.

Intel, ARM, Nvidia and Barefoot

One of Alibaba's high-profile partnerships to solve the scalability challenge is with Intel. Earlier this year, Aliyun kicked off a pilot program with Intel for a cloud-based FPGA acceleration service. Specifically, Aliyun will use Intel Arria 10 FPGAs, Intel Xeon processor-based servers and software development tools for application acceleration as a ready-to-go pre-configured infrastructure. The Aliyun service offers systems designers cloud-based workload acceleration as an alternative to investing in on-premises FPGA infrastructure. It might not be all Intel inside for future Aliyun data centres. In April 2016, a China-based Green Computing Consortium (GCC) was formed with the goal of establishing a deep ecosystem in China for big data, enterprise and cloud computing platforms based on the ARM architecture. Under this consortium, ARM is working with Alibaba, Baidu, China National Software and Service, Dell. Guizhou Huaxintong, the joint venture company of Guizhou and Qualcomm Hewlett Packard Enterprise/H3C (HPE), Lenovo and Phytium. Alibaba has also been working with Nvidia to develop its AI processing performance. In 2016, Aliyun stated that it would use Nvidia Tesla K40 GPUs to power a range of HPC, AI and deep learning applications.

Meanwhile, earlier this month Barefoot Networks, which is developing high-speed switching silicon, announced that Aliyun had adopted its 6.5 Tbit/s Tofino switch, claimed to be the fastest and P4-programmable switch chip. Although the size of this order was not disclosed, the deal suggests that Aliyun might be developing its own networking gear, much like Google and Facebook, rather than buying brand-name equipment from the traditional vendors.

Clean power for Aliyun?

In its mid-2017 investor presentations, Alibaba noted green data centres as an area of focus for Aliyun infrastructure. However, the Greenpeace Clicking Clean report from January 2017 criticised Alibaba for not committing to a timeline for 100% renewable energy for its data centre operations and for a lack of basic transparency about the energy efficiency of its existing facilities.

Will Alibaba and Aliyun catch on in the U.S.?

For Chinese multi-nationals already in the U.S. market, the opening of local Aliyun data centres is good news. A seamless service on one hyperscale public cloud is easier to manage than having to host some in Aliyun China and some in AWS U.S. There is a good chance that Aliyun U.S. can capture many of the Chinese companies abroad. But are those customers enough to challenge AWS or Microsoft? Probably not.

Jack Ma's vision is decisively in favour of the little guy, the SMBs. His outreach to the U.S. gives entrepreneurs and independent farmers easy access to Chinese buyers. One criticism of Alibaba's global expansion plan, as noted in a recent Bloomberg perspective is that the company lacks the distribution logistics and warehouses in China that Amazon possesses in the U.S. Moving goods from the US to the Chinese market will never be as easy as domestic operations. There are other bi-lateral trade issues between the nations that stand in the way, such as tariffs and quotas on many types of products.

Then there is the question of capex investment needed to keep pace with Amazon, Microsoft and Google in the U.S. cloud market. Some of these players are investing multiple billions per quarter in the cloud infrastructure. While Alibaba did not provide capex guidance during its Investor presentations, the figures do not appear to be close to the levels of the U.S. players. Each of the U.S. public cloud giants has also made significant investments in network infrastructure. For instance, Facebook and Google are teaming up to build the highest capacity, trans-Pacific cable system to date. The Pacific Light Cable Network (PLCN), which will stretch 12,800 km between Los Angeles and Hong Kong, will have an estimated cable capacity of 120 Tbit/s when it enters service in the summer of 2018. Both players are betting that their platforms will be super-heavy of trans-Pacific bandwidth. This level of commitment from Alibaba has not been evident, at least not yet.

ZTE announced at Mobile World Congress Shanghai 2017 the availability of its 5G integrated solution, a comprehensive suite of solution for 5G wireless access, core network and bearer network designed to help operators accelerate their 5G commercial network deployments.

ZTE's 5G integrated solution, based on a cloud-based network architecture design, provides customers with integrated 5G network infrastructure and will support 5G industry standards as they are approved while enabling the transition from 4G to 5G.

The 5G integrated solution features network slicing functionality, which enables support for multiple services and application scenarios, and is designed to allow service providers to adapt to a range of business models for different market verticals. In addition, the closed-loop application development and operation system based on devops facilitates rapid service release and deployment.

The flexible cloud architecture of ZTE's 5G integrated solution is designed to enable operators to build open networks with wireless access, core and bearer networks based on a SDN architecture for enhanced efficiency.

The solution includes ZTE's 5G RAN, which offers support for all bands and multiple access modes to help enable multi-network operations. The Cloud ServCore core network is based on cloud-native service architecture, with user-defined network functions and capabilities to meet the needs of development, testing, release and updates. The Flexhaul bearer network provides high transmission capacity with low latency and SDN-based dynamic network resources adjustment.

Coriant announced that the National Research and Education Network in Chile (REUNA) has selected the Coriant hiT 7300 Multi-Haul Transport Platform equipped with its CloudWave Optics to upgrade its national DWDM backbone network.

The Coriant solution, delivered in collaboration with education sector solutions partner Grupo Binário and local telecoms systems integrator Raylex, is designed to enable REUNA to scale transmission up to multiple 200 Gbit/s optical channels to support the increasing bandwidth demands of research and education applications and efficiently support low latency transfer of large quantities of data between locations.

As the national R&E network (NREN) in Chile, REUNA supports the country's research, education and scientific communities and provides interconnectivity with partners worldwide. The REUNA backbone network serves around 35 institutions, including universities, research centres and international astronomical groups.

REUNA's strategic collaborations include connectivity projects for the AURA Observatory, with which it has partnered to implement a photonic superhighway for the transport of data from the Large Synoptic Survey Telescope (LSST) - an advanced infrastructure for science and education that enables high-speed communications between research facilities located near La Serena and the Chilean capital of Santiago.

Leveraging optical networking technology including power-efficient coherent interface technology, flexi-rate transmission and flexi-grid ROADM capabilities, REUNA's new DWDM network, which is currently being deployed, will enable the organisation to deliver more flexible and resilient high-speed services, while optimising its backbone network in terms of spectral efficiency, terabit-level scalability and programmable, automated end-to-end service activation.

Coriant's hiT 7300 platform is a coherent communications system that supports up to 25.6 Tbit/s capacity when equipped with flexi-rate, flexi-grid and super-channel capabilities based on the CloudWave Optics photonic layer technology, which integrates a signal processing engine, optimised photonics and embedded software intelligence. The solution is designed to provide optimised optical reach and performance for diverse transmission applications, including in challenging fibre conditions.

Management of the REUNA DWDM network will be provided by the Coriant Transport Network Management System (TNMS) end-to-end management solution.

Huawei announced that it will deploy what is believed to be the first G.fast network in the Middle East in partnership with Omantel, a leading operator in Oman, to enable the company to extend ultra-broadband services more efficiently by utilising existing copper infrastructure.

Huawei noted that Omantel has abundant copper resources in its existing network, and to address growing subscriber demand for digital home services and HD video Omantel plans to reconstruct its networks to enhance its broadband services. Specifically, by 2020 the company aims to cover 90% of residential subscribers in Muscat, Oman’s capital city.

Under the program, in selected service areas Omantel plans to deliver bandwidth from 200 Mbit/s to 1 Gbit/s to high density buildings to offer end users higher bandwidth and improved services.

For the project, Huawei proposed its E2E G.fast solution that features optical line terminal (OLT), G.fast distributed point unit (DPU) and G.fast CPE to help Omantel to meet its objectives. It noted that field tests show G.fast can support 800 Mbit/s and 400 Mbit/s over loops spanning 100 metres and 300 metres, respectively, which is greater than can be supported using ADSL2+ or VDSL2 technology.

Omantel will deploy the Huawei G.fast in the basements of tall, multi-story buildings, where the existing copper infrastructure, including telephone lines, will be reused to deliver ultra-broadband access. This approach removes the need for installation work inside homes to help lower costs, while the large-capacity G.fast sites, which are able to serve up to 96 lines, help to further reduce per-subscriber costs.

Omantel will also deploy Huawei's G.fast home gateway, which provides support for voice, data and video services, as well as dual-band gigabit-class WiFi services.

Huawei stated that to date more than 20 operators have conducted G.fast deployments or tests, with the technology currently deployed commercially with customers in the UK, Switzerland, Germany and Canada.

Offering comprehensive interface support, the MP1900A solution is an all-in-one tool designed to provide accurate measurements for the next-generation, high-speed electronic and optical devices and optical transceivers utilised in high-end servers, communications equipment and optical transceivers/modules, including for M2M and IoT applications.

The SQA MP1900A BERT allows users to accurately evaluate high-speed interface designs during the early development stage. The products all-in-one extendible platform can be used to measure the performance of network-side interfaces, such as 400/200/100 Gigabit Ethernet, as well as internal PCI Express bus interfaces, and thereby help reduce design evaluation times and costs.

The solution integrates a Pulse Pattern Generator (PPG) that provides typical intrinsic jitter of 115 fs rms and typical Tr/Tf of 12 ps, while total peak-to-peak jitter is typically no more than 6 ps and typical input sensitivity for the internal error detector (ED) is 15 mV.

The solution additionally offers multiple features designed to further improve testing accuracy and efficiency, notably a link negotiation function that provides support for high-speed digital interface standards that allows connection of the MP1900A to the DUT for enhanced bus interface evaluation. Engineers can use this function to conduct PCI Express Gen 4/5 testing, LTSSM status analysis, jitter generation and CM/DM (common mode/differential mode) noise injection.

Additionally, MP1900A provides a jitter measurement function for evaluating signal integrity, while the 10Tap emphasis function and equaliser function can be utilised to characterise test signals according to transmission path loss.

Anritsu's SQA MP1900A BERT can be configured with peripheral equipment to increase measurement capabilities. Specifically, an integrated solution featuring the MP1900A can support generation of the 32 and 64 Gbaud PAM4 signals required for 200 and 400 Gigabit Ethernet measurements, BER measurements, jitter and amplitude noise injection and emphasis addition.

Cablevisión Holding, a spin off company formed through the corporate restructuring of Buenos Aires-based Grupo Clarín, announced that its subsidiary Cablevisión, the leading pay TV and broadband provider in Argentina, and Telecom Argentina, a major mobile and fixed telecom company in Argentina, plan to merge their corporate and operational structures to establish a converged telecom operator.

The transaction is intended to create a major telco in Argentina as well as to better enable the companies to participate in the opening up of the telecom sector in the country, which under the regulatory framework is scheduled to begin as of January 2018.

The companies stated that on June 30th the boards of both companies approved a preliminary merger agreement (compromiso previo de fusión), with the proposed transaction designed to align with the wider industry convergence in the provision of fixed and mobile, video and Internet services to enable quad-play offerings. The combination is also expected to enhance the companies' ability to invest in the latest mobile technology and to deploy a high speed fibre network.

Under the terms of the agreement, Telecom Argentina will implement a merger by absorption of Cablevisión. As a result, Telecom Argentina will increase its share capital by $1,184,528,406, and therefore will issue on the effective date of the merger $1,184,528,406 shares of common stock, each to be registered with a nominal value of $1, hold one vote, and be issued either as a class A share or a new class of common stock (class D shares), which will be distributed Cablevisión shareholders in accordance with the agreed exchange ratio.

The exchange ratio approved by the companies' boards provides for 9,871.07005 shares of Telecom Argentina for each Cablevision share. Thus, CVH, the controlling shareholder of Cablevision, and Fintech Media, Cablevision's minority shareholder, will receive a total direct and indirect interest in Telecom Argentina equal to 55% after its capital increase. The current shareholders of Telecom Argentina will retain the remaining 45% of the share capital following the merger.

The transaction is subject to the respective shareholder meetings' approval and to regulatory approvals.

As well as being the main pay TV and a major broadband service provider in Argentina, Cablevision is also the second largest pay TV provider in Uruguay. Telecom Argentina is a leading mobile and fixed service provider in Argentina and also a major mobile carrier in Paraguay.

Nokia and Telkom South Africa wholesale division Openserve announced they have conducted a trial of G.fast technology in an office complex in Pinelands, South Africa, during which they achieved fibre-like access speeds over existing copper infrastructure deployed into buildings.

Nokia noted that the trial was carried out in preparation for Openserve's commercial deployment of G.fast planned for later in 2017.as part of the company's program to quickly expand its network footprint across South Africa.

The G.fast trial with Openserve demonstrated an aggregate, upstream and downstream, bandwidth of 900 Mbit/s over short copper loops, and speeds of up to 500 Mbit/s downstream and 250 Mbit/s upstream on an existing copper line over a distance of 150 metres.

Nokia's G.fast technology uses the final few hundred meters of copper within a building to deliver ultra-broadband access to end users. The solution is designed to allow Openserve to meet growing demand for fibre-like broadband speeds without significantly increasing its operational cost. The Nokia solution incorporates vectoring technology to reduce cross-talk interference between copper lines and help to increase data speeds.

Nokia noted that G.fast technology is increasingly being used in locations that are difficult or costly to reach with fibre as it allows operators to deploy fibre to the building and avoid the need to install it all the way to each individual unit. G.fast uses existing copper lines in a building, thereby also helping to reduce disruption.

Nokia claims to be the leading vendor for G.fast technology, with more than 40 customer trials completed and 10 customers commercially deploying the technology worldwide, including BT Openreach in the UK, Chunghwa Telecom in Taiwan, A1 Telekom Austria, Energia Communications in Japan and Frontier in the U.S.

Nokia recently announced that Frontier Communications had selected its G.fast technology to increase in-building broadband speeds for residents of apartment and multi-dwelling units (MDU) across Connecticut.

Ericsson announced that chairman of the board of directors Leif Johansson, who has served in the role from 2011, has informed that he will not make himself available for re-election at the annual general meeting of shareholders 2018, and that it has therefore begun the search for a replacement.

Ericsson's nomination committee stated it has commenced the search for a new chairman. The company announced on June 1st that its nomination committee, under chairman Petra Hedengran, comprised the following members: Petra Hedengran, Investor AB; Bengt Kjell, AB Industrivärden and Handelsbankens Pensionsstiftelse; Christer Gardell, Cevian Funds; Anders Oscarsson, AMF Försäkring och Fonder; Johan Held, Afa Försäkring; and Leif Johansson, the chairman of the board.

In March, Ericsson announced a corporate reorganisation under president and CEO, Börje Ekholm that eliminated its existing two-tiered leadership structure, Executive Leadership Team and Global Leadership Team, and replaced it with a single executive team. In addition, the existing ten geographic regions were simplified into five regions, and the structure of five market areas was reduced to three.

At the same time, Ericsson stated it was exploring strategic opportunities for its Media business and IT cloud infrastructure hardware business.

As of April 1st, Ericsson's business areas are as follows: Networks; Digital Services; and Managed Services. Market areas are as follows: North America; Europe & Latin America; Middle East & Africa; North East Asia; South East Asia, Oceania & India.

Regarding his decision, board chairman Leif Johansson said, "… (In) the first quarter Ericsson presented a new, more focused business strategy… (which) supported by the board and the major owners, creates a solid foundation for realising Ericsson's full potential… the company now enters a new phase, with focus on execution and a new ownership constellation… it is natural to let the owners jointly propose a chairman and ahead of this I want to announce that I will not be available for a next term".